Ode to HI

18-04-2024 Pieter de Kok Blog

HI is going to be big, really big. HI enables people to think for themselves, use a moral compass, reflect and share relevant knowledge. HI is the foundation of audits.

The Planning Audit Meeting (PAM) is part of the audit, where HI seems to be becoming increasingly important. In more and more of these meetings, you see that HI is becoming the connecting factor between the young professionals and senior team members. Knowledge sharing through intense conversations, with IAS 315 as the most important stepping stone, forms the basis for a relevant risk analysis as the starting point of the audit.

Under the influence of the HI factor, which is now also increasingly fed by society, HI seems to be giving more depth and meaning to the fraud conversation between members of the audit team and between the audit team, client and governing body. HI helps the auditor to put things into perspective and to better place the fraud conversation in the context of the company and entrepreneur.

HI therefore explicitly supports the planning and thus gives direction to the assessment of the effectiveness of significant processes, including Internal Control.

Around the IT General Controls (ITGC), HI helps to evaluate the extent to which IT influences the relevant business processes of companies. As an auditor, you want to take the right IT applications into scope and link them to processes and transaction flows.

When using process mining, for example, HI ensures that the results of the process mining can be ordered in a logical manner. This is often necessary, because process mining outcomes are similar to spaghetti. Lots of data, no information yet. The beautiful visualizations and process insights are still appreciated by clients.

The results of the assessment of processes, ITGC and internal control measures are ultimately included in the management letter. To prevent them from disappearing into the well-known drawer, these must be creative, stimulating, challenging management letters. Typically conditions supported by HI.

The power of a well-prepared audit based on HI deployment becomes tangible when the work program seamlessly connects to the activities from the planning phase, including the risk analysis.

HI also plays a role in optimizing the preparation of an audit by the company which is to be audited. This is first done through research of available data and possible relevant control information. Peel off, step by step. HI then also supervises the process of communication, coordination and monitoring of the preparation, so that the organization which is to be audited gets to work.

The depth and relevance of an audit is partly determined by the enthusiasm, courage and passion of the audit team. The interaction with the client team, the transparency in discussions and reconciliations further increase the relevance of the audit. Without HI, there is no depth.

After all the preparation and deployment of high doses of HI at the front end of the audit process, it is now HI-full-on-time. Data scripts form the connection between the risk analysis, the work program, the tailor-made control questions and the data. HI takes care of this connection and the correct structure of the data scripts. The outcomes should be evaluated in the team and with the client team, and escalation is needed where necessary. HI monitors the tone and the follow-up here.

In 2024, we will be able to beautifully visualize the story of the audit, the interpretation, the conclusions, the actual connection in, for example, Tableau. Telling this story is a wonderful application of HI. This is not only about creativity, but also about ingenuity and getting to the heart of the matter. Sharing knowledge, pointing out causes, is what makes the day beautiful. As a profession, we are already working ESG. This transition is still quite a challenge for many large companies. Only HI will ensure that this entire ESG transition remains valuable and fits in with the company. The danger of being hampered by the Red Tape is quite high, the thinking, the fine-tuning, the reflection: only HI can do this.

The tightened IAS 600 guidelines also rightly pay more attention to HI elements of culture, communication and alignment in the component and group auditor setting. Everyone in the field knows that conducting dossier reviews in the IAS 600 context is sometimes frustrating. Managing a good process requires not only management skills, but also a high degree of empathy. This is only possible with HI.

All these HI properties are also important for the implementation of independent quality reviews, internal quality reviews and internal monitoring of the quality systems. In order to get the pain points and points for improvement crystal clear on the table, the dialogue must be found with an open mind. Real conversations, between real people. HI also helps to reduce stress and panic when things go wrong. Talking to each other, listening to each other, it’s HI in its purest form.

HI also plays a crucial role in evaluation and appraisal interviews that every office has with employees. The more balance in looking back and forward, the more ambition in setting (improvement) objectives, the more valuable these instruments are.
If things are not going the way they are, if there is room for improvement, there is an opportunity for coaching and guidance of employees. This requires a high level of HI in order to stimulate the ability to learn. This is where HI meets HI.
This also applies to the annual internal knowledge tests. Based on a healthy mix of HI, you can make something beautiful out of this. HI also needs to be reactivated. Nothing is more HI than challenging yourself, pushing the bar. If you use the gift of a moral compass, you organize it neatly and you don’t embarrass an entire profession.
Because things sometimes go wrong due to the wrong use of HI, at the office level, in the team, at the assignment level, we need HI to repair and learn from what is not going well. After all, that’s what HI is all about.

If you are extra HI-stimulated and you move around on platforms such as LinkedIn or Accountant.nl, HI also helps you to behave decently, to respond in a relevant way and to just be yourself. Nothing is more HI than real HI, it’s not only authentic, it’s also very relatable.

I am convinced that from 2025 onwards we will see even more HI in the audits; in fact, I think all audits will be carried out on the basis of HI. That may take some getting used to, taking a step back from some other unnoteworthy hypes, but HI is going to be big. Without Human Intelligence, there are no audits!

Pieter de Kok
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Pieter de Kok